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24th May 2002 - Outlook for S&P 500 (See
Chart Provided)
The following is based upon analysis of the S&P 500 index. Due
to the nature of markets, there are numerous similarities with the
DJIA and as such there is no point in duplicating this information
and I would encourage readers to look at the other markets and derive
their own forecasts on these assumptions.
Long Term Perspective.
When looking at the market from a distance Gann said that we should
look at the 30, 20, 15, 10 7, and 5 year cycles. Also of importance
is the 180 week cycle.
We are approaching the end of the 15 year (180 months) cycle from
the 1987 high which occurred on 25th Aug 1987. The second (lower)
high before the crash occurred on 2nd Oct 1987. Information not
canvassed here is the Nov Low, although it too should be taken into
account.
Looking backwards from August/Oct 2002
The 5 year cycle lining up with Oct Highs in 1997.
The 7 year cycle gives us nothing
The 10 year cycle has a very weak alliance with the Oct 5th 1992
low.
The 15 year cycle lining up with the Aug 1987 high.
The 20 year cycle lines up with the Major low in Aug 1982
and the 30 year cycle has a weak alliance with the insignificant
1972 Aug High and Oct low
Short Term Perspective
Fibonacci Time Zones :
610 days from the Jan 31 2001 High :- 3rd Oct 2002
377 Days from the Sept 21 2001 low : 3rd Oct 2002
233 Days from the 7th Jan 2002 High :- 28th Aug 2002
Time Space Division
24th Mar 2000 - 21st Sept 2001 * 61.8% gives :- 24th Aug 2002
Time Ranges
The most prominent are on the Chart supplied (See
Chart)
Squares
The S&P has been in a 153/4 cycle since Mar 2000 (courtesy
Bill McLaren)
Placing a Gann Square grid of 153.5 on the Chart, terminating Cycles
are visible from the following points:
From 22nd May 2001 forward - 3 Squares terminate 27th Aug 2002
From 31st Jan 2001 forward - 4 Squares terminate 8th Oct 2002
From 21st Dec 2000 forward - 4 Squares terminate 27th Aug 2002
From 1st Sept 2000 forward - 5 Squares terminate 9th Oct 2002
From 17th July 2000 forward - 5 Squares terminate 24th Aug 2002
From 24th Mar 2000 forward - 6 Squares terminate 1st Oct 2002
Other Dates to watch :
21st Sept (360 solar deg from Sept 2001 low)
8th July ( 180 solar degrees from 7th Jan 2002 high )
As can be seen from the above analysis, there is expectation of
possible COT around the last week in August and the first 2 weeks
in October. Historically, these periods have produced some strong
events.
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Summary for Week Ending 6th July 2002
The markets finished with a rocket on Friday, with all three posting impressive
rises following the July 4th holiday which passed largely without incident.
From a psychological perspective there would have been considerable pressure
built up over the possibility of another terrorist attack. This pressure
was released on Friday, however the telling feature is the level of Volume
associated with this movement which was very low. Looking from a technical
perspective, we are again looking for 1-2 day countertrend rallies with
the possibility of a 3-5 day run against the trend. Apart from the relief
that thankfully nothing occurred on July 4th, there is still the backdrop
of uncertainty that an 'event' may occur when it is not expected. Couple
this with the auditing fiasco coming to light, and its difficult to get
excited about any long term upward movements at this point in time.
Swing Charts
DJIA, S&P500, NASDAQ
Just like last week...All swing Patters are Down !
Charts
DOW The Chart this week is the Daily Log chart, again showing the
line of support running from the '87 low. Also the chart shows that this
was the first week in 7 that did not generate a new low for the movement.
This in itself is not significant, however looking at the daily chart
shows a small double bottom occurring around the 8832 level, and the Static
time zone showing a possible turn around at the 38.2% zone.
S&P This week the chart shows the 153.5 Square Grid as well
as the 180 Solar Deg line as indicated in the Original forecast showing
8th July as a possible COT. Looking at the chart this COT does not look
viable as a collapse to new lows from the current point would be required
on Mon/ Tue this week. The Square indicates a completion around the 25th
July and this will be monitored in the coming weeks.
NASDAQ This week the chart shows the current Channel containing
the action for the past few months. We are approaching the lower boundary,
but as mentioned last week, the market has plumbed new depths since breaking
through the Sept 01 support level and expectations should be for a continuation
of this behavior. On the news front there is nothing to indicate that
there should be a sustainable rally in the Tech laden NASDAQ index.
DJIA See
Chart
S&P 500 See
Chart
NASDAQ See
Chart
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